As you approach retirement, are you feeling good about your finances? Kudos to you if you feel comfortable with the amount you’ve saved.
Now it’s time to start thinking about how you will manage your savings so it provides you with income throughout your retirement years.
“Outliving retirement savings is a significant concern for Americans,” says Jennifer Putney, vice president of Total Retirement Solutions for Prudential Retirement:
“In a recent survey, Prudential Retirement found that 71 percent of respondents fear they won’t have enough money to last a lifetime, and just one in five is highly confident they’ll have sufficient retirement income.
But even those who have saved well and are confident about their money need a formal plan to help them transition from working and accumulating to retired and taking distributions from savings.”
Ten thousand older workers reach retirement age every day, and many will be unprepared for retirement. Nineteen percent of workers 55 and older have account balances of $100,000 to $249,000, and just 23 percent have saved $250,000 or more, according to the latest research from the Employee Benefit Research Institute (EBRI).
“Typically, we advise clients to save 10 percent to 15 percent of every paycheck for retirement, and that they start saving early,” Putney says. “The EBRI research indicates many Americans aren’t saving that much.”
Retirees face many challenges when trying to save enough money to last throughout their lifetime.
Americans are living longer, markets are volatile, inflation may occur and current investments may fall short.
All these factors can add up to an income shortfall during retirement. Putney offers some tips for workers approaching retirement:
* Educational and motivational information is widely available online to help with retirement planning. Prudential offers websites, Preparewithpru.com, which provide valuable information about saving for retirement and bringyourchallenges.com that illustrates five common behaviors that can get in the way of successful retirement planning.
* Develop a formal transition plan. Your lifestyle will change significantly when you move from actively earning a paycheck to living in retirement, and your income will need to grow in a different way.
* Take advantage of everything available to you, including any financial counseling offered by your employer or a plan administrator. Maximize contributions to your workplace-based plan or IRA, and don’t forget to take advantage of IRS-allowed catch-up contributions if you’re 50 or older.
Funding retirement with log home rental income?
In the last tip above Putney says, “Take advantage of everything available to you…” This where we might be able to help. Building a log home as either a second home or vacation getaway allows you rent it for additional retirement income.
According to the well respected financial website, BankRate.com, “If you’re willing to take the plunge, rental properties offer a rare opportunity to generate extra cash in post-work life. Indeed, a well-located unit in a middle-class neighborhood can produce an extra $200 to $1,000 per month after expenses.”
Even if you only offer your log home rental during limited periods of time during the year, here in Western North Carolina, because of our temperament summers, spectacular autumns and mild winters people flock to this region of the country looking for places to rent and relax an astonishing 9 months out of the year!
This means a log home rental can literally pay for itself as a second home or a weekend getaway can easily fund a substantial nest egg if managed properly.
Now we admit we are not financial advisers but Barbara Pietrowski, a Certified Financial Planner in Roanoke, Va., who specializes in rental real estate, says”Real estate can be a wonderful asset to have in retirement, because when you have tenants, you have money coming in every month and, if you don’t have pensions, that’s important.”
So while a log home can be a substantial investment, it can also provide you with a great way to not only build a secure nest egg but also provide you with a steady source of income during those post-work years.